Top 6 Main Functions of Management – Discussed! (2024)

Functions relating to activities such as production, purchase, sales, advertising, finance, and accounting differ from one enterprise to another. But functions of management are common to all business units and non-profit organizations.

Henri Fayol (1949), the founder of modern management theory, divided all activities of organizations into six groups:

1. Technical:

Production and manufacturing activities.

2. Commercial:

Buying, selling, and exchange activities.

3. Financial:

Capital optimization activities.

4. Security:

Protecting mutual interest of employees and employers.

5. Accounting:

Book keeping (recording) of profits, costs, liabilities, and preparing reports such as balance sheets.

6. Managerial:

Planning, organizing, directing, coordinating, and control­ling.

Fayol distinguishes between the principles and elements of management. Principles are the rules and guidelines, while elements are the functions of management. He has grouped the elements into five managerial functions — planning, organizing, commanding, coordinating, and controlling. His classification is widely accepted.

Luther Gullick used the acronym POSD CORE—letters of the acronym indicate different management functions, namely, planning (P), organizing (O), staffing (S), directing (D), coordinating (CO), reporting (R), and budget­ing (B). Reporting is a part of the control function. Budgeting represents both planning and controlling. Newman and Summer also classified management processes into the functions of organizing, planning, leading, and controlling.

The most useful method of classifying managerial functions is to group them around the components of planning, organizing, staffing, directing, and controlling. The above functions of management are common to all business enterprises as well as to organizations of other fields, but the manner in which these are carried out will not be the same in different organizations.

All these functions constitute the job of a manager, and the relative importance of each of them varies from time to time. Thus, tight economic conditions may force a firm to lay more emphasis on control for the time being, while a growing concern may have to devote more time to organizational problems. Another way of describing the functions of management is to consider it as a process. As a process, management refers to a series of inter-related func­tions, that is, planning, organizing, staffing, leading or directing, controlling, and coordinating.

1. Planning:

Planning means deciding in advance on what, how, and when something is to be done. It involves projecting the future course of action for the business as a whole and also for the different sections within it. Planning is thus, the preparatory step for actions and helps in bridging the gap between the present and the future.

Since planning is essentially choosing, it is dependent upon the availability of alternatives. It is through this process of choosing that decision making can obviously be seen as an important aspect of planning. Thus, planning is an intellectual process and signifies the use of a rational approach to finding solutions to problems.

In a more concrete sense, the process comprises determination or laying down of objectives, policies, procedures, rules, programmes, budgets, and strategies. Management planning might be for a short period and/or for the long run. For improved efficiency and better results, short-range plans should be properly coordinated with long-range plans. Planning is a fundamental function of management and all other functions of management are greatly influenced by the planning process. The increas­ing interest evinced in planning amply manifests the importance of planning in businesses.

Very often, the planning process is erroneously described as the prerogative of the top management. But the fact is that planning perme­ates all levels in an organization and all managers, irrespective of their posi­tion in the management hierarchy, must plan within the limits of their author­ity and the decisions of their seniors.

2. Organizing:

Organizing is the next function of management. Organizing involves break­ing a plan into activities, grouping those activities, and allocating resources to them. This is done by structuring the functions and duties to be performed by a group of people for the purpose of attaining the objective of the enterprise. Functions and activities of the enterprise depend upon the objectives to be accomplished and are directed towards fulfilment of such objectives. This necessitates the establishment of activity-authority relationships in the enter­prise.

More specifically, organization as a function of management involves the following steps:

1. Determination of activities of the enterprise, keeping in view its objec­tives

2. Classification of such activities into convenient groups

3. Assignment of these groups of activities to individuals

4. Delegation of authority and fixing of responsibility for carrying out such assigned duties

5. Coordination of these activity-authority relationships throughout the organization

Thus, division of work among people and coordination of their efforts to achieve specific objectives are the fundamental aspects of organization. Problems related to organizing arise only when group efforts are involved. Similarly, an organization is always intended to achieve objectives and as such, it is a means to an end and never an end in itself. Therefore, for better results, organizations should be based upon practical prudence and sound application of organizational principles.

3. Staffing:

Organization, as a function of management, helps the executives to establish positions and lay down their functional relations to each other. However, it is through staffing function that different positions in the organizational structure are manned. The staffing process, therefore, provides the organization with adequate, competent, and qualified personnel at all levels.

Since successful performance by individuals largely determines the success of the structure, it is imperative that the management pays adequate attention to various aspects of the staffing function. It implies that managers should properly assess the manpower requirements of the organization, consistent with the qualifications required for proper and efficient discharge of duties on the existing and possible jobs in the organization, laying down of suitable selection and placement procedures, developing employee skills through training and appraisal schemes, and devising suitable schemes of compensation.

Staffing is a continuous function. A new enterprise employs people to fill up staff positions in the organization. In an established concern, the deaths/ retirements of employees and the frequent changes in the objectives and the organization itself make staffing a continuous function of management.

4. Directing:

Mere planning, organizing, and staffing are not sufficient to set the tasks in motion. Management has well-coordinated plans, properly established duty- authority relations, and able personnel, yet it is through the function of direction that the manager is able to make the employees accomplish their tasks by making them integrate their individual efforts with the interest and objectives of the enterprise.

It calls for properly motivating, communicating with, and leading the subordinates. Motivation induces and inspires the employees to perform better, while through good leadership, a manager is able to make his subordinates work with zeal and confidence.

Directing the subordinates embraces three essential activities:

1. Issuing orders and instructions

2. Guiding and counselling the subordinates in their work with a view to improve their performance

3. Supervising the work of subordinates to ensure that it conforms to orders and instructions issued

5. Controlling:

While directing, the manager explains to his subordinates the work expected of each of them and also helps them perform their respective jobs to the best of their abilities so that the enterprise objectives can be achieved. But even then, there is no guarantees that work will always proceed according to plan. It is this possibility of actions deviating from plans that calls for constant monitoring of actual performance so that appropriate steps may be taken to make them conform to plans. Thus, the controlling task of management involves compelling the events to conform to plans.

The important steps to be initiated in this direction are as follows:

1. Measurement of accomplishments against pre-determined standards and recording of deviations

2. Analysing and probing the reasons for such deviations

3. Fixing of responsibility in terms of persons responsible for negative deviations

4. Correction of employee performance so that group goals are achieved through effective implementation of plans devised to attain them.

Control is thus closely related to the planning aspect of the job of a manager. But it should not be viewed merely as a post-mortem of past achievements and performances. In fact, a good control system should suggest corrective measures so that negative deviations may not recur in the future. The principle of feedback when incorporated in the control system can be of great use in this direction.

6. Coordinating:

Coordination, as a separate function of management, has been advocated by many authorities including Henri Fayol. However, coordination, being all pervasive and encompassing every function of management, is considered to be more an important managerial essence than a separate management function. Poor coordination is attributed to failure in performance of all the above-listed management functions.

Coordination deals with harmonizing work relations and efforts at all levels for achieving some common purpose. It may be described as unifying and achieving harmony among individual efforts for the purpose of accomplishing group goals. The whole idea of coordination is to adjust, reconcile, and synchronize individual efforts so that group efforts become more effective and help to achieve some common objectives.

Sometimes coordination is confused with cooperation and it is considered, though erroneously, that if there is cooperation, coordination will automatically follow. Though cooperation helps to achieve coordination, it is by no means the sole factor that ensures the achievement of coordination. One can take the example of a cricket match.

Without coordinated efforts on the part of the players, it is difficult for the team to win a match. Coordination is not spontaneous. Differences in approach, understanding, timing, interest, or efforts have to be reconciled with while synchronizing individual efforts. While managing, a manager coordinates the work of his or her subordi­nates.

For better results the following guidelines are suggested:

1. Coordination should be viewed as the responsibility of every manager right from the bottom to the top, and he or she must ensure that every individual should know the dominant goals of the enterprise and also how his or her job contributes towards accomplishing the objectives of the department.

Even when a supervisor is able to accomplish the ob­jectives of the department, he or she should be made to realize that the department’s achievement is nothing unless combined with the achieve­ments of the other units and contributes to attaining the dominant objec­tives of the organization. Thus, every manager should understand and appreciate the hierarchy of objectives.

2. Individual efforts are more easily synchronized if coordination is achieved in the early stages of planning and policy making. Thus, where production and marketing policies are at cross-purposes, coordi­nation between the two groups of activities will be a serious problem.

3. Coordination is better achieved through the understanding of interper­sonal, and horizontal rather than vertical relationships of people in the organization or by issue of orders for coordination.

4. Another essential requirement is good communication. As a result of constant changes in the business environment, plans and policies are frequently revised and compromises and adjustments are made. If the required information is not communicated well in time, unifying indi­vidual efforts made in order to accomplish the goals of the enterprise become difficult.